Procedures for Forestry Concession Fee Imposition, Collection and Payment

Fees for forestry area utilization permits can be expensive, however their collection has been at times lackluster and insufficiently regulated: to increase and better manage collection of non-tax state income from exploitation of the lucrative forestry sector, the Minister of Forestry issued Regulation No. P.12/Menhut-II/2010 on Procedures for Imposition, Collection, and Payment of Forestry Concession Permit Fees. 

Notwithstanding two exceptions to be mentioned subsequently, this regulation determines that the ‘permit fee’ for each specific type of forestry concession - there are many - will be calculated using two variables: (A) land area; (B) the tariff-rate for units of land in a particular type of concession. Simply said: (A  x  B) = permit price.

However, for business activities that (1) use forestry products in a natural forest, or (2) exploit a natural forest’s ‘ecosystem rehabilitation forest,’ there is an added variable: (C) time - or period for utilization. In other words, for utilization of sensitive forestry areas, the formula is: (A) land area, multiplied by (B) particular tariff-rate for land units in the specific type of concession, multiplied by (C) period of use. In short: (A  x  B  x  C) = permit price.

For each permit, a payment order for the forestry concession fee will be issued, and permit-holders will have 30 days to pay through either the Ministry of Forestry to a state account, or to a Ministry-designated bank. After three warnings, those who fail to pay will have their permits revoked.

This regulation repeals and replaces (1) Minister of Forestry Regulation No. P.32/Menhut-II/2007, and (2) Minister of Forestry Regulation No. P-25/Menhut-II/2009 on the Procedure for Imposition, Collection and Payment of Forestry Concession Fees within Production Forest.

This regulation has been in force since 23 February 2010.